Are Two Cloud Servers Better Than One?

Jennifer Parker | Special to CNBC.com

Monday, 12 Nov 2012 | 2:05 PM ETCNBC.com

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Cloud computing is fast becoming as ubiquitous as the clouds circling the Earth. As more and more people depend on "the cloud" to store sensitive data, they also realize it isn't perfect —and sometimes it fails because of storm surges or human error.

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The fact is there will be outages. If you only have one server location, you are exposed," said Bernard Golden, vice president at enStratus Networks, an IT consultant supporting providers such as Amazon Web Services, Google Storage, and VMware. "The appropriate response is to operate switch regions," he said.

Events such as Amazon Web Service's outage in October, which affected its most heavily used data center in Virginia, support Golden's claim. Some AWS customers, such as Netflix, have duplicate cloud systems. As a result, their businesses stayed up and running during the outage. Others, including popular sites like Reddit and Pinterest, temporarily went dark.

Hurricane Sandy also tested the cloud systems of McGraw Hill, which operates a cloud-based data server in lower Manhattan. "The electricity went out, and the system went with it. But customers weren't impacted, because they have enough other data centers to keep it going. There are backups on the West Coast, in New Jersey, even London," said Vipul Nakum, who worked as product team manager for Standard & Poors, now owned by McGraw Hill.

The very concept of one cloud, never mind two, is confusingly abstract. But one VMWare consultant put it simply: "Entering the cloud is the act of storing data on someone else's server."

It is a maturing market. Cloud service providers, who typically charge on a per server, per user basis, are ready and waiting for consumers to hedge their risk and buy subscriptions for multiple locations. Amazon, for example, says it now operates eight AWS regions worldwide and 21 "availability zones." Having a "global" presence on the cloud is even an option. But is it an advantage?

Skeptics are quick to point out the privacy, security, and retention risks posed by the public cloud. But these are weighed against major cost savings. Keeping data private, whether on traditional servers or on private cloud servers that are custom-designed and protected by corporate firewalls, can be enormously expensive.

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"Top financial firms often pay $500 per user, per year for private cloud services. One of our clients has 80,000 users," said the VMWare consultant, who spoke on the condition of anonymity. "That's just licensing cost per user; never mind software, IT personnel, and consulting services. That's why people say forget that, I'm going to the public cloud for 5 cents an hour."

Opting out of cloud computing has other downsides. Businesses like S&P, which have monthly and quarterly website traffic peaks pegged to economic releases, often need flexible server capacity to pay for exactly the amount they're using. Traditional servers don't allow for this.

Golden explains: "You have two choices. Either you keep the same everyday number of servers, and once a month you find you don't have enough capacity when web traffic goes up 10 times, or you buy enough equipment to handle peak load, and you're paying for idle equipment 28 days of the month."

But again, capacity issues are also cost drivers. And while large companies with highly sensitive data, as in the health care or financial sectors, choose to pay high prices for private cloud services, these costs are simply not possible for smaller businesses — which is why they've gone to the public cloud en masse over the past five years.

The sheer scale of cloud service dependence raises the stakes for risk. If the pricing structures of cloud computing tell us anything, it's that the main risk is privacy. Getting that comes at a premium.

A private-practice attorney in Florida is grappling with an unanswered legal question because her business is run on the public cloud. While she "couldn't possibly pay for a private server," if her client's private information were ever leaked by a hacker, she might be liable for client lawsuits. For this reason, she declined to be identified.

Source: bluemilecloud.com

In her case, as in others, cost still trumps these privacy concerns. But the question remains: Are businesses legally protected if cloud systems are breached and private data is leaked?

Questions such as these have Washington researchers at EPIC (Electronic Privacy Information Center) waging an uphill battle for cloud regulation. The group has unsuccessfully asked the Federal Trade Commission to provide privacy safeguards for Google's cloud-based service Google Drive, which has the right to "reproduce, modify, and create derivative works" using uploaded content, as well as "to publicly display files," according to EPIC.

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Retention concerns soon follow, leaving consumers to wonder whether their data can be corrupted or deleted. Take recent iPhone upgrades, for example. Their default settings sent many Apple customers' data into the "iCloud." How many of its users know that much of this data, according to the company, will likely soon reside in Apple's new center in Prineville, Ore.? If there is an outage, does phone data risk deletion?

The answer is: not likely — because Apple has opted for multiple cloud centers. It seems the answer to risk is to buy backup clouds, or "redundancies" in IT parlance.

The trend is based on the logic that if you are using cloud services, two clouds are better than one.